Cameron makes savings tax pledge

louiser123

wholeheartedly agree!!!!!!

another helping hand for those who are pretty much ok anyway.

Guy_Montag

Sir_Humphrey wrote: »

And former Oxford University Conservative Club member and former Oxford Union president Nick Mason...(Sir Humphrey BA (Oxon), student contempory of Mr Mason).

In fairness I was an arch-Red during my school & uni days, now I'm coming to terms with the idea that I may be a crusty old Tory like my Dad. :eek: Dammit.

Still determined to vote LibDem as long as possible though.

WTF?_2

louiser123 wrote: »

wholeheartedly agree!!!!!!

another helping hand for those who are pretty much ok anyway.

You mean savers?

What a great attitude - anyone with the financial sense and responsibility to save some money deserves to be penalised. No wonder the country is up to its neck in debt.

nickmason

Welcome back Sir Humphrey! (I am quite amused by your anonymous "outing" of me, given that I haven't been in any way shy about my political allegiance or indeed elected position.)

I'll take issue with "income is the main determinent [sic] of saving". If that were so, then we would hardly have the disparity that we have seen between those that MEW etc, and those that save - after all, it is clear that a vast amount of the perceived income is in fact borrowing/"dissaving".

the main determinant of saving is attitude and incentives. If there is nothing to be gained from saving, then people won't. Of course it's more complicated because a lot can change over time and saving by definition has a time lag in the payback.

So it's a case of whether people think it's worth saving. The decision is based on a variety of things; future outlook, self-respect, willingness to self-bankrupt.

This is the problem with "equality". A sensible policy that will encourage saving, reward those who have saved, rescue those whose savings income are being eroded by low rates, is derided for rewarding the rich.

This board is full of (third-hand, mainly) examples of how messed up the attitude and incentives are.

Cameron is absolutely right to encourage people to save. And as I've said before, this statement goes a lot further to having a credible philosophy than anything coming out of the government at the moment.

nickmason

Sir_Humphrey wrote: »

Income is the main determinent of saving, not the interest rate. With inflation falling fast, IRs should soon be positive in real terms anyway (banks/building society accounts cannot have negative interest anymore than the MPC base rate).

:T :T :T :T :T :T :T :T :T :T :T :T :T
Thank you for explaining to me that deflation is a good thing!
What an extraordinary state we're in where deflation is a good thing because it can bring us back some positive real interest rates.

No wonder no-one's been saving!

GooeyBlob

Let's face it, most of us are here because we know the value of money, and even more, the value of holding on to it and spending it wisely. We're careful to stretch it as far as it will go, because it's very important to us. This idea won't earn many of us a great deal extra in interest, but it is more of an incentive to save, while the government has been systematically running down incentives to save and encouraging everyone to spend money they don't have. They're still doing it, in fact.

Money is hard to come by, and I want to make every penny I have work for me. Sometimes I think the government has an easy-come, easy-go attitude to money, throwing it around without a care in the world.

If a policy like this had been implemented a few years ago, this country would not be so badly placed to deal with the recession. It's what we need going forward, and what should have been in place years ago. Certainly a step in the right direction.

Gorgeous_George

A basic rate taxpayer with £35,000 banked at 5% would save only £350 per year (less than was lost when the married couple's tax allowance was scrapped). A higher rate taxpayer would save double at £700.

More you have in savings (i.e., the richer you are) the bigger the giveaway.

Sounds like a Tory policy. Nothing for the poor but a lot for the rich.

Could sound the end of Premium Bonds.

GG

nickmason

I had to double take at the maths - but the post did say £35K income from savings, so subject to other tax bits and pieces I think it's broadly right.

Frankly I agree that that's not the target audience - if it is, it's a pretty small one - but for someone living off savings who is receiving maybe £10K a year from a nest egg of a couple of hundred k, it'll make a big difference. And those people aren't so rare.

(It might incidentally encourage the housing market by incentivising people to sell...;) )

nickmason

Gorgeous_George wrote: »

Sounds like a Tory policy. Nothing for the poor but a lot for the rich.

Except that of course by encouraging saving, it does something for everyone; and more for those who aren't currently saving by encouraging them to do so (as long as it's a long term policy nudge).

nickmason

Gorgeous_George wrote: »

It is ignorannce like this that gets people voted in.

A basic rate taxpayer with £35,000 banked at 5% would save only £350 per year (less than was lost when the married couple's tax allowance was scrapped). A higher rate taxpayer would save double at £700.

NOT TRUE. Higher rate taxpayers would still pay 40%

More you have in savings (i.e., the richer you are) the bigger the giveaway.

Sounds like a Tory policy. Nothing for the poor but a lot for the rich.

GG

So "nothing for the rich, but a lot for the poor" might be a better way of phrasing it.